Gold prices rose for a third straight session on Wednesday to hit a one-week high, buoyed by a weaker dollar, while investors awaited US inflation data for clues on the pace of future US interest rate increases. Spot gold was up 0.2 percent at $1,332.01 an ounce, as of 0745 GMT. Earlier in the session, it hit $1,336.86, its highest since Feb. 6.
US gold futures rose 0.3 percent to $1,334.7 per ounce. A retreat in the greenback helped the bullion - which is priced in dollars - gain over 2 percent from a one-month low of $1,306.81 hit last week.
"With the US dollar once again striking a bearish chord, the long gold set up looks favourable," said Stephen Innes, head of trading APAC at OANDA. The market on Wednesday looked forward to US inflation report for the month of January, due for release later in the day, which could soothe, or incite, concerns of faster rate hikes globally.
"Recent price action is indicative of short-term positioning, with expectations of strength toward $1,335 - $1,340 as short positions are further tested," MKS PAMP Group trader Sam Laughlin said. "The caveat to a short-term push higher, however, is the upcoming Chinese New Year holiday, which will remove physical demand from the market."
Spot gold is expected to edge up into a range of $1,343-$1,352 per ounce, as suggested by a retracement analysis, Reuters technical analyst Wang Tao said.
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